CIMA Exam CIMAPRA17-BA1-1 Topic 1 Question 72 Discussion

Actual exam question for CIMA's CIMAPRA17-BA1-1 exam

Question #: 72
Topic #: 1

A good has a price elasticity of supply of 0.8. Which of the following best describes the effects of a rise in demand for this good?

1. More will be spent on the good

2. More of the good will be made and sold

3. Producer incomes will rise

4. Price rises more than proportionately to the rise in quantity produced

A1 & 2 only

B1 & 3 only

C1 & 4 only

D1, 2, 3 & 4

Show Suggested Answer

Suggested Answer: A

by Carey at Jul 25, 2023, 06:25 AM

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Kimbery

1 months ago

This question is a piece of cake! With that elasticity, it's clear more will be sold, but the price will spike too. I'm going with C, no doubt about it. Though I do wonder if the producers will use their newfound riches to buy a private jet or something.

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Chantay

2 months ago

Haha, more producer income? Time to start my own lemonade stand! But seriously, I think C is the way to go here. The price increase will outpace the rise in quantity, so more revenue all around.

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Clorinda

10 days ago

Definitely, C is the answer. It's all about that price increase outpacing the rise in quantity.

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Rueben

18 days ago

Definitely, C is the way to go. It's all about that price increase outpacing the rise in quantity.

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Gregoria

26 days ago

Starting a lemonade stand sounds like a fun idea! But yes, C is the best option here.

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Dalene

27 days ago

I agree, C seems like the correct choice. The price will rise more than the quantity produced.

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Edison

1 months ago

Yeah, I think C is the best option too. It makes sense that the price would increase more than the quantity.

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Isreal

1 months ago

I agree, C seems like the correct choice. The price will rise more than the quantity produced.

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Emeline

2 months ago

I'm not sure, but I think the answer is A) 1 & 2 only.

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Amber

2 months ago

I disagree, I believe the answer is D) 1, 2, 3 & 4.

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Reuben

2 months ago

Hmm, I'm not sure. 0.8 elasticity means supply is somewhat responsive to price changes. I guess C could be right, but I'm not convinced that producer incomes will necessarily rise. Guess I better brush up on my economics before the exam.

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Rolland

1 months ago

User2: Yeah, but I'm not convinced that producer incomes will necessarily rise.

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Matthew

1 months ago

User1: I think C could be right, price rises more than proportionately to the rise in quantity produced.

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Leonardo

2 months ago

I think the answer is C) 1 & 4 only.

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Maxima

2 months ago

Well, this seems straightforward. With a price elasticity of supply of 0.8, I'd say option C is the correct answer. Price will rise more than proportionately, and more will be spent on the good. Sounds like a win-win for the producers!

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Nell

1 months ago

Agreed, option C covers all the effects of a rise in demand for a good with a price elasticity of supply of 0.8.

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Viki

1 months ago

It's always good for producers when demand goes up. Option C seems like the best choice here.

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Marquetta

2 months ago

That's true, and more will be spent on the good as well. Looks like the producers will benefit from this increase in demand.

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Francis

2 months ago

I think you're right, option C makes sense. The price will definitely rise more than proportionately.

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